Consider the IS-LM curves for an economy with flexible exchange rates. An increase in the foreign income will result in the:
A) LM curve shifting to the right.
B) IS curve shifting to the right.
C) LM curve shifting to the left.
D) IS curve shifting to the left.
Ans: B) IS curve shifting to the right.
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The clothing industry has many firms with differentiated products and no barriers to entry. The cereal industry has a few firms with either identical or differentiated products and moderate barriers to entry
The food industry is characterized as ________ and the cereal industry is characterized as ________. A) perfect competition; monopolistic competition B) monopolistic competition; oligopoly C) oligopoly; monopolistic competition D) perfect competition; perfect competition E) monopolistic competition; monopoly
________ uses the concept of marginal analysis to determine the optimum choice
A) Optimization in margins B) Optimization in levels C) Optimization in markets D) Optimization in differences
Under price leadership
a. the leader must be the dominant firm in the industry b. all firms follow price changes initiated by the leader c. price cuts are followed by other firms in the industry, but price increases are not d. price increases are followed by other firms in the industry, but price cuts are not e. price wars often occur as a result of tit-for-tat strategies
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2. B. P1 and Y2. C. P4 and Y2. D. P1 and Y1.